Leisure World of Maryland Board of Directors operates illegally -

From: justus <justus.lwmd@gmail.com>

Date: December 17, 2016 2:12:22 PM EST

To: "LW Exec. Committee" <execcomm@lwmc.com>, LW Board of Directors <board@lwmc.com>

Cc: George Leventhal <George.Leventhal@montgomerycountymd.gov>, Benjamin Delegate Kramer <benjamin.kramer@house.state.md.us>, roger manno <roger.manno@senate.state.md.us>, brian frosh <bfrosh@oag.state.md.us>, alisa bralove <abralove@oag.state.md.us>, Steve Dickerson <steve.dickerson@usi.biz>, JustUsƒ, richard thornell <rpthornell@comcast.net>,Congressman Chris Van Hollen, Delegate, Jamie Raskin,CPACƒ

Subject: Illegally constituted LWCC BOD -failure to comply w/ Maryland Homeowners Association Act and other laws

To: Leisure World Community Corporation

Attn: David Frager, Chair

Subject: Illegally constituted LWCC BOD must immediately come into compliance with Maryland Homeowners Association Act and other laws

During the 12/9/16 LW Executive Committee work session discussion, General Manager Kevin Flannery said, "if legally you're identified as a homeowners association then you don't have any opportunity through policy of the board to set what you wanna do. You have to conform to what the law says."

Statements declaring non-HOA status uttered in this session clearly identify tacit agreement to obfuscate LWCC obligations under law.

As a matter of fact, LWCC has long been registered as an HOA as required by Statute. Furthermore, Leisure World Community Corporation HOA status has been affirmed by the State of Maryland Office of Attorney General:

1. "LWCC is subject to the HOA Act."

2. "RP § 11B-106.1 requires the association to “elect” a governing body."

3. "According to the OAG's Consumer Protection Division, because the language of the statue says "elect" the better read of the current statute is that each member of the mutual itself would be entitled to vote as to who the governing body would be."

By law, in each case, the mutual LWCC BOD representatives must be elected by and from the entire mutual membership. In permitting representation by selection rather than election, LWCC is acting in defiance of State of Maryland statue. As such, they are not legally empowered to conduct business on behalf of the owners and Cooperative members. The continued pattern and practice of selecting rather than electing mutual representatives including alternates to the LW BOD, violates the State of Maryland Homeowners Act.

Section 11B-106-1a of the MD HOA Act which states the following:

“A meeting of the members of the homeowners association to elect a governing body of the homeowners association shall be held…”

In direct opposition to the legal requirements, LWCC Bylaws - Article III. The Board of Directors Bylaws read:

http://lwmc.com/docs/Trust_Documents/LWCC_Bylaws_Revised_01-29-2013.pdf

Revised 1/29/13

Bylaws of the Leisure World Community Corporation

ARTICLE III. THE BOARD OF DIRECTORS

Section 1. Directors and Alternates. Each Mutual is entitled to select Directors,qualified under the provisions of Section 2 of this Article, to cast its votes and otherwise represent it on the Board of Directors. Each Mutual may also select Alternate Directorswho, in accordance with Section 5 of this Article, may represent the Mutual when its Director is absent. Such selections shall be made in accordance with procedures established by the Mutual. A Mutual may select more than one alternate for each Director; if it does so, it shall specify in writing any conditions governing the service of the alternates, including their order of precedence.

In order to become legally compliant:

It is incumbent upon the LWCC BOD Executive Committee to notify the President of each "underlying association" (mutual) that a special election be conducted, in which unit owners/shareholders will directly elect their "underlying association" (mutual) LWCC BOD representative(s) and alternate(s). Thereafter, the annual election ballots of each "underlying association" (mutual) are to include nominees for the specific positions of LWCC BOD representative(s) and alternate(s).

Each mutual annual election ballot must include the names of those unit owners/members choosing to run specifically as the LWCC BOD representative(s) and/or alternate(s). The nomination and vote is to be inclusive of every association member, i.e. election is not to be confined only to mutual BOD members.

As currently constituted, the LWCC BOD is in violation of the above referenced statute, thereby rendering invalid all actions taken by the LWCC BOD. Notably included in the actions subject to being adjudicated are: all votes to authorize/approve overall LW budget appropriations, contracts, plans of action and funding including "FEP" ($12 Million Facilities Enhancement Plan).

The selected BOD participants have historically relied upon the master policy indemnification clause. Now being made aware that all are seated in violation of the statute, the issue of personal liability comes into question. Travelers will assuredly review this matter and potentially revoke individual indemnification coverage.

This body has the ethical and fiduciary responsibility to immediately rectify this long standing state of HOA non-compliance. If convened, the scheduled January 6, 2017 LWCC BOD/Executive Committee meeting, should not be for the purpose of conducting elections. Such elections should not be held until special elections are conducted in each "underlying association" (mutual), at which time duly elected representatives will be seated and legally enabled to vote for Executive Committee members.

Failure to initiate compliance efforts by 1/2/17, including postponement of the 1/6/17 meeting elections, renders this as an official request for an LWCC Dispute Resolution Hearing, which is to be open to all LW owners/shareholders. This notice is considered exhaustion of remedy as required by CCOC regulations.

Awaiting your prompt reply, we anticipate your willingness to resolve this matter which is of great significance to all Leisure World residents.